Mobile Banking: The New American Addiction - NTT DATA Services
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FINANCIAL SERVICES | DIGITAL PRACTICE
Mobile Banking: The New
American Addiction
An NTT DATA Consulting U.S. Mobile Banking Lifestyle Study
finds 55% of consumers access their bank accounts 2-3
times a week or more
January 2015
ST RAT EG IZ E. IM PL E ME NT. R U N. © NTT DATA Consulting, Inc.
Table of Contents Introduction 3 America’s Addiction to Mobile Banking 5 What’s Driving Mobile Banking? 6 The New Device Dynamic 7 There’s a Device for That 9 Customers Prefer a Simplified Device Lifestyle 11 The Phablet Phenomenon 12 Wearable Technology: Hype or Hope? 13 Implications for Financial Institutions 14 Conclusion 15 Research Methodology and Demographics 17 Sources 18 About NTT DATA Consulting 19 Abstract Mobile banking is hyper-accelerating. According to NTT DATA Consulting’s U.S. Mobile Banking Lifestyle Study, more than half of U.S. consumers are using mobile banking more often than two years ago, and conducting more transactions while they are logged in. NTT DATA Consulting surveyed 1,005 U.S. consumers online and conducted qualitative phone interviews with executives at the top 20 U.S. financial institutions to understand what is driving mobile banking growth and how the changing size and shape of mobile devices (the “form factor”) will influence the way Americans do their banking in the 21st century.
Introduction Mobile banking is hyper-accelerating. According to NTT DATA Consulting’s U.S. Mobile Banking Lifestyle Study, more than half of U.S. consumers are using mobile banking more often than two years ago, and conducting more transactions while they are logged in. NTT DATA Consulting surveyed 1,005 U.S. consumers online and conducted qualitative phone interviews with executives at the top 20 U.S. financial institutions to understand what is driving mobile banking growth and how the changing size and shape of mobile devices (the “form factor”) will influence the way Americans do their banking in the 21st century. NTT DATA Consulting’s research focused on four device types – laptops, tablets, phablets* and smartphones. These four device types comprise virtually all consumer interaction with their banks online. Desktop computers were not included in our research because of their declining usage, nor were wearable devices because of their as yet unproven role in financial services. However, the survey did ask questions on wearable technology, which led to noteworthy findings discussed on page 13. NTT DATA Consulting’s analysis revealed that users have an appetite for managing their finances across multiple devices, and they expect a high degree of consistency in features and functions across the platforms that they use. With most banks aspiring to provide a digital omni-channel customer experience these days, NTT DATA Consulting’s research reinforces the importance of managing customer experience consistently in an environment characterized by device complexity. * For the study, NTT DATA Consulting defined a phablet as a smartphone with five- to seven-inch diagonal screen size, such as the Galaxy Note 4 and the iPhone 6 Plus.
52%
of consumers are doing more mobile banking
than two years ago
NTT DATA Consulting White Paper
American’s Addiction to What’s Driving Mobile
Mobile Banking Banking?
“Mobile moments” are part of our everyday lives. What factors contribute to the likelihood that customers
Americans are increasingly wed to their mobile devices will use mobile banking? Conversely, what may
as they text, tweet, email and click through news feeds. repel users from using mobile banking? NTT DATA
In fact, the average American smartphone user checks Consulting’s study determined that there are three
his/her phone 110 times a day1. As Americans continue factors that make it more likely for consumers to
to adopt technology that enables them to be online engage in mobile banking:
from virtually
1. Ease of use
any location,
2. Ability to make payments
this number
3. Better features
promises to
climb. The maxim goes that you only have one chance to
make a first impression. This is especially true in mobile
Checking
apps. If a mobile app is poorly designed, not intuitive
bank accounts
and/or offers an ineffective feature set, users will not log
online is
on a second time. In many cases, users will delete an
clearly
app that provided a negative first experience.
becoming a
part of many Mobile banking customers are highly sensitive to design
Americans’ that focuses on ease and efficiency. In fact, more than
mobile 60% of respondents declared that they were much
moments. more likely to use mobile banking when it is easy to use
NTT DATA and offers features that make their lives easier. Outside
Consulting’s of features, functionality - specifically the ability to make
research payments - is driving mobile banking.
found that
55% of
Americans access their accounts via mobile banking
2-3 times per week and, of that number, a full 26% use Do the following factors make you more or less
mobile banking habitually, logging on 4 or more times likely to use mobile banking?
per week. This group of habitual users is of particular
Less Likely Neutral More Likely
relevance to banks, as they not only use mobile
banking more often, they also spend more time doing it.
Ease of
4% 26% 72%
Use
For banks, opportunities arise from this trend. Banks
are increasingly able to engage with their customers
Ability
whenever and through whatever device their customers
to Make 7% 30% 65%
choose. As customers spend more time on mobile Payments
banking, banks must leverage the platform to increase
loyalty, enhance brand image and continuously improve Better
4% 32% 65%
customer experience and satisfaction. Features
Q19. Compared to two years ago, do the following factors make you more or less
likely to use mobile banking? (1-much less likely, 5-neutral,10-much more likely)
6 © NTT DATA Consulting, Inc.
Mobile Banking: The New American Addiction
Habitual mobile banking users – those who access their increase by about 20% in the next two years. When
accounts 4+ times per week – have the greatest focus asked which device consumers will purchase in the
on usability. Virtually all of the habitual users in NTT next 24 months, more than 80% of respondents
DATA Consulting’s survey told us that they are more stated their intent to buy a smartphone. This was the
likely to do mobile banking when features and functions highest rate of anticipated purchase and shows the
are easy to use. Conversely, habitual users can be smartphone as the preferred form factor.
expected to disengage quickly from a mobile banking
Tablet — Not a Contender
platform that is difficult to use.
While tablet use will increase over the next two
As banks increase focus on the mobile environment, years, fewer than 50% of respondents plan to use a
their success will depend on the ability to provide a tablet for mobile banking. Today, less than a third of
simple, intuitive and useful customer experience. consumers use their tablet for mobile banking. NTT
A mobile app that is hard to use will only set a bank up DATA Consulting believes that tablets are increasingly
for failure. and primarily used as media consumption devices, with
users watching more Netflix and Hulu on their tablets
The New Device than doing mobile banking.
Dynamic Phablets — Next Big Thing
Use of phablets for mobile banking will see the most
profound increase in the next two years. Using a
Features and ease of use aren’t the only drivers of
phablet for mobile banking will more than double,
growth in mobile banking. When survey respondents
cresting at 11% by 2016. While the growth rate is
were asked, “What devices do you plan to purchase
impressive, the percentages for phablets are still low.
in the next 24 months?” the smartphone was by far
With the release of the Samsung Note series in 2012,
the most popular choice, with 84% of respondents
and iPhone 6-Plus in 2014, NTT DATA Consulting
expecting to buy a smartphone in the next two years.
believes phablets will grow rapidly in market share.
The devices consumers are buying with mobile banking
in mind are also helping to shape the new landscape.
Smartphone Remains the Dominant New Purchase
Survey participants were also asked, “Which of the
following devices do you expect to be using for mobile Q22. What devices do you plan on
purchasing?
banking in 24 months?” The results in the chart on 84%
page 8 indicate that we are approaching a period of
significant change.
What these percentages reinforce is the decisive shift
from browser-based banking to mobile devices/apps.
Laptop — Still Relevant
Laptop use, which currently enjoys a prominent place in
the respondents’ device landscape at 84% for mobile
banking usage, will go down slightly. It is the only 26% 25%
device type that showed a reduction and NTT DATA
14%
Consulting predicts that laptop use will remain flat over
the next two years.
Laptop Smartphone Tablet Phablet
Smartphone — Front Runner
The use of smartphones for mobile banking will
© NTT DATA Consulting, Inc. 7
NTT DATA Consulting White Paper
Mobile Device Growth Will Dominate Banking During the Next Two Years
Q10: Which of these devices do you use
for banking? (2014)
Q24: Which of the following devices do
you expect to be using for banking in 24
months? (2016)
84%
81%
62%
52%
44%
32%
11%
5%
Laptop Smartphone Tablet Phablet
There’s A Device For That increasingly expect to be able to start in one place
and finish in another when it comes to managing their
finances online.
Bank customers are expanding the number of banking High frequency activities
activities that they conduct across their devices. No
On the whole, mobile users log on, review their
single device is used for a particular mobile banking
balances, move their money, look at recent activity
activity. Users increasingly expect to conduct the
and then logout. It is imperative that banks get these
transaction of their choice on the device of their choice
table stakes transactions right or face the risk of users
whenever they want. Because of these expectations,
becoming disengaged and looking elsewhere for a
it is essential for banks to assess their progress
more effective mobile banking platform.
toward building seamless customer experience that
transcends both channel and device. Customers
8 © NTT DATA Consulting, Inc.
Mobile Banking: The New American Addiction
Gaining Popularity is the dominant device, but mobile does have a role.
Although these transactions are less frequently used, The norm for users is to default to a laptop for the often
consumers have an increasing expectation to receive intensive data entry at the front end of a mortgage
notifications and alerts, fill out applications for new or brokerage application, then move the follow-on
products and services and perform an eSignature. conversation regarding clarifications and updates to a
Today 70% of users are leveraging the notification and mobile environment.
alerts features offered from their banks and they exhibit
Quintessentially Mobile
no preference on which device they receive them.
Depositing checks with mobile devices is a
Users clearly want to receive their notifications and
predominantly mobile transaction. Our research found
alerts on the device that they have with them at that
that more than 60% of smartphone and phablet users
moment, which ties back to the need for digital omni-
are using their mobile device to deposit checks. This
channel.
has been a significant development for individuals and
Less Common small business owners, enabling a level of convenience
Applying for a mortgage or a brokerage account are that was impossible only a few years ago. Consumers
the least-used features from the survey. This is not do not use laptops or tablets for this transaction to
because these features are poorly-designed, but they nearly the same frequency that they use mobile, most
are transactions conducted only a few times during the likely because of the picture taking complexity of other
average American’s lifetime. When you look closer at form-factors.
the preferred devices for these transactions, the laptop
What Are Mobile Banking Customers Doing With All Of These Devices?
Top 4 most frequent mobile banking activities in America:
viewing balances transferring funds reviewing transaction paying bills
history
© NTT DATA Consulting, Inc. 9NTT DATA Consulting White Paper 10 © NTT DATA Consulting, Inc.
Mobile Banking: The New American Addiction
Despite Multiple Device
Ownership, Customers “If an alien race swooped
Would Prefer a Simplified
Device Lifestyle down on the planet and forced
earthlings to use only a single
NTT DATA Consulting’s research shows that the
majority of Americans today have a three device
computer, I’d choose the iPhone
lifestyle: very often this is a laptop, a tablet and a
6 Plus. If you’re looking for one
smartphone. Despite the fact that most users have
three devices and anticipate the degree of complexity machine for everything, a phablet
staying intact or even increasing, NTT DATA Consulting
sees a pent-up desire for greater simplicity. Our study like this isn’t a bad way to go.”
findings indicate that more than half of respondents
- Farhad Manjoo, New York Times
(57%) would strongly prefer two devices on which to
manage their personal and professional lives, but don’t
see how to get there at this time.
Are phablets the answer?
As users crave greater simplicity in the number of “I Would Prefer a Two-Device Lifestyle”
devices they use, it is possible that the phablet may be
Q22. I would prefer to have just two devices if they could fit all of my
part of the solution. Phablets are a popular choice for needs? Rated on a scale of 1-10. Reponses indicate percentage of
respondents for 8 and above.
consumers seeking a larger smartphone with a form
factor similar to a tablet. Having all your data on a single 67%
phablet offers greater convenience and a possible
61% 61%
path to a simplified device lifestyle. As phablet sales
have increased, there has been a visible reduction in
tablets sales.1 While there is correlation in time across 52%
these two trends, any statement around direct causality
should be treated as conjecture. At this time, it is not
clear if the phablet will unlock the two-device lifestyle
that so many want.
Very Limited Moderate Frequent Habitual
Less than 2-3 times a 4 or more Part of my
once a week week times a week daily routine
© NTT DATA Consulting, Inc. 11NTT DATA Consulting White Paper
The Phablet Phenomenon
100%
Whether or not phablets are the key to a more growth in phablet use for mobile
simplified device lifestyle, they certainly have become
banking over the next 24 months,
a phenomenon in America. According to NTT DATA
Consulting’s research, phablet use for mobile banking
across all demographics
will grow by more than 100% percent over the next two
years. Additionally, BI Intelligence reports that global
phablet shipments will hit 1.5 billion in 2019, a marked 46%
increased over prior years.2 of Americans are more likely to
NTT DATA Consulting believes that phablets will corner conduct mobile banking due to
approximately 30% of the mobile device market share larger mobile devices, such as the
by 2020. We also project that tablet use will decline phablet
as a device on which to do banking, given that our
study found 68% do not prefer to use tablets for
banking today.
1 in 6
What does the phablet mean for banks? U.S. consumers believe mobile
The value of a phablet is simple: it offers more screen banking is an important reason to
space on which to manage the customer experience. A buy a large screen smartphone/
phablet not only offers banks more digital real estate for phablet
an expanded feature set, it also provides opportunities
for promotional offers and marketing initiatives that may
have seemed intrusive on a smaller screen.
Phablet Market Share Growth
40
Expected
phablet
35 market share
Percentage of Market Share
30
25
20
iPhone 6+
15 released
10
5
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Year
SOURCE: NTT DATA Consulting U.S. Mobile Banking Lifestyle Study
12 © NTT DATA Consulting, Inc.Mobile Banking: The New American Addiction
Wearable Technology: Hype or Hope?
18% WHICH OF THESE
WEARABLE DEVICES
DO YOU PLAN TO
PURCHASE?
OF U.S. CONSUMERS
PLAN TO PURCHASE A LE GL
OG SU
NG GAL
A
WEARABLE DEVICE M
AS
GO
SA
XY
S
G EAR
2%
H
4%
C
AT
W
What will it take to make wearable
LE
OTH
APP
technology a success? E
R
3%
8%
FE BA
LI
ND
LG
ATTRACTIVENESS 1%
53% say it is important for your device
to look attractive
NOTIFICATIONS
39% are interested in receiving notifications
and alerts
82%
of U.S. consumers wouldn’t
purchase any wearable
device
PAYMENTS
30% are comfortable making a payment with
a wearable device
“
“Wearables are a significant trend in technology, although
their utility to financial services remains to be seen. NTT
DATA Consulting believes that wearables are a must-watch
development in fintech.”
— Byl Cameron, Digital Practice Lead
© NTT DATA Consulting, Inc. 13NTT DATA Consulting White Paper
Implications for Financial exaggerated. Many consumers still have a strong
Institutions preference to use the laptop as their go-to platform
for online banking. Consequently, ongoing rigor in
maintaining and expanding the online banking platform
As one senior executive at a top 10 U.S. financial is essential to ensuring that customers have a positive
institution explained, “The world we live in is our biggest and engaging user experience. NTT DATA Consulting
obstacle.” An ever-increasing consumer demand for believes that a “mobile first” strategy makes sense, but
instant gratification is seeping into every facet of our not to the detriment of legacy online banking.
lives, including how we bank. People have no patience
Plan for Larger Devices
for waiting – for anything – particularly Gen Ys and
NTT DATA Consulting believes financial institutions
Millennials who have grown up online.
will have new opportunities to offer features and
When a 20-year-old college student requests funds functions that might be considered undesirable on
from her parents, she expects to see the money smaller smartphones. Banks should capitalize on the
instantly appear in her bank account when she views extra device real estate of a phablet by assessing the
her account balance on her mobile device. When a opportunities it presents — such as increasing mobile
mobile app doesn’t work the first time, it’s likely to be advertising, re-architecting navigation, adding new
deleted. In mobile technology, as in life, if you don’t get functionality and much more.
it right the first time, you may not get a second chance.
As the expectations around user experience rise in
While the increasing consumer appetite for effective the coming years, so too will expectations around
digital platforms poses challenges for organizations, efficient and effective use of the increased screen size
the benefits are very real. Recent research from — by consumers and bankers. Sales and marketing
Forrester indicates that companies that invest in digital opportunities may be one of the biggest beneficiaries
transformation outperform the S&P index by about of this interconnected trend. What once appeared
44%.3 This drives home the point that investment in cluttered and intrusive on a smaller smartphone screen
innovation and revenue growth are deeply linked. may now look clean and useful on the screen of a
larger smartphone or a phablet. All financial services
The path to digital success
firms stand to gain from re-evaluating their customer
Financial firms are struggling with how to prioritize experience in the context of form factor growth trends.
investments across five platforms that almost all
The banks that move first to leverage the extra space
companies have: mobile web, smartphone app, tablet
offered by phablets/larger smartphones will be better-
app, secure web and public web. Today, financial
positioned to increase their share of wallet. That means
institutions assume the need for a certain degree of
usability studies to investigate different customer
complexity in their online and mobile environments.
preferences and behaviors on larger smartphones
But NTT DATA Consulting’s research suggests that
should be kicked off now.
there are opportunities to simplify online and mobile
environments, even when customers use multiple Pursue a Digital Omni-Channel
mobile devices. One of the key user experience themes that financial
institutions are wrestling with is how to manage a
All of NTT DATA Consulting’s recommendations revolve
seamless experience across the multiple channels and
around delivering an excellent user experience through
varied devices that characterize the modern banking
ongoing digital transformation, which is the key success
customer. The main question is this: What simplification
factor for banks in today’s rapidly-evolving technology
and streamlining opportunities would enhance the
environment.
mobile customer experience?
Don’t Abandon the Legacy Online Banking Platform
NTT DATA Consulting believes that the answer to this
Rumors of legacy online banking’s demise are greatly
14 © NTT DATA Consulting, Inc.Mobile Banking: The New American Addiction important question may involve building a holistic online and mobile customer environment. Most customers who use their bank’s public website, secure website and smartphone app don’t think they have used three different systems. Customers look at all three as a single process – interacting with their money. One way to move toward an environment where the “many” become “one” is to look at a digital omni-channel. A digital omni-channel simply means developing all of your online and mobile applications to work together. It produces an environment in which users can start an application in one platform and then finish it in another. It is one in which expected features like secure messaging and alerts are accessed from any and every platform a bank offers. It’s important to emphasize that NTT DATA Consulting does not believe that a pure digital omni-channel always makes sense. An example of a feature that doesn’t need to be on every platform is online check deposit – our data tells us that isn’t a sensible investment for laptops. Rather, financial institutions will benefit from identifying the missing pieces of a positive customer experience on each platform, and then work to close those gaps. Conclusion Banking has become a central part of many American consumers’ mobile moments – those moments throughout the day when mobile users check email, Facebook, Twitter and also manage their finances. NTT DATA Consulting’s study shows that Americans are addicted to mobile banking as never before, and that bank customers want to conduct their banking activities across all of the devices they own: laptop, smartphone, phablet and tablet. They expect to be able to do the transaction of their choice at the time of their choice and on the device of their choice. In such an environment, it is imperative that financial services firms focus on customer experience as never before. Delivering an environment that is easy to use and seamlessly integrated across channels will position firms for success. © NTT DATA Consulting, Inc. 15
NTT DATA Consulting White Paper
Research Methodology and Demographics
• 1,005 survey responses
• All respondents live in the U.S. or are U.S. citizens
• The survey was conducted online
• Participants were recruited from an online research panel
• Participants were required to be over 18 years of age
• Survey gender was representative of the U.S. population (48% male, 52% female)
Device Types Owned Household Income
64% own three or more device types Overall mix of respondents reflects a higher
income base
59%
3% Less than
$49,999
15%
$50,000 to
$99,999
57% 26% $100,000 to
$249,999
$250,000 or
more
34%
Age Distribution
Distribution of respondents across age
segments
18-34
25% 29%
35-50
5%
2%
Over 50
47%
Four or Three Two device One device
more device device types type
types types
Device Types: Laptop, Tablet, Phablet, Smartphone
16 © NTT DATA Consulting, Inc.Mobile Banking: The New American Addiction
Sources
1. Reisinger, Don. (2 February 2015). “Down go tablet shipments - for the first time ever.” CNET. http://www.cnet.com/news/
worldwide-tablet-shipments-fall-for-first-time-ever-in-q4/
2. Danova, Tony. (10 July 2014). “The Phablet Phenomenon: Trends and Growth Forecast For the Device That Is Taking Over
Mobile.” Business Insider. http://www.businessinsider.com/the-phablet-phenomenon-trends-and-growth-forecast-for-the-de-
vice-that-is-taking-over-mobile-sai-2014-6
3. Lima, Paul (@Paul_Lima). “Companies that invested in digital transformation outperform the S&P by 44% according to #for-
rester #AdobeSummit. 10 March 2015, 2:30 p.m. Tweet.
© NTT DATA Consulting, Inc. 17About NTT DATA
Consulting
NTT DATA Consulting takes an industry-centric
approach to business and technology consulting. We
seamlessly integrate business strategies and enabling
technology to help clients accelerate business-driven
transformation and compete in the digital world. NTT
DATA Consulting has the unique ability to create end-
to-end solutions by tapping the entirety of NTT DATA’s
global technology and business process capabilities. In
financial services, our 1,000-plus business consultants
and 4,000 technology experts work with 25 of the
leading financial institutions in North America. Visit
www.nttdata.com/USconsulting to learn more.
About NTT DATA
NTT DATA is a leading business and IT services
provider and global innovation partner with 80,000
professionals based in over 40 countries. NTT DATA
emphasizes long-term commitment and combines
global reach and local intimacy to provide premier
professional services, including consulting, digital,
managed services, and industry solutions. We’re part
of NTT Group, one of the world’s largest technology
services companies, generating more than $100 billion
in annual revenues and partner to 80% of the Fortune
100. Visit www.nttdata.com/americas to learn more.
www.nttdata.com/usconsulting
704.936.1600
ntt.data.consulting@nttdata.com
@NTTDConsulting
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